Could mobile technologies be the future of retail?

For a growing number of smartphone owners, the idea of leaving home without a mobile device is simply unthinkable. Every day, we use our smartphones to talk, text, share and shop. And as we continue to see the benefits of relevant offers and expedient advice, we're becoming more willing to share more information about ourselves with trusted businesses.

For businesses, these consumer trends mean one simple thing, says David Sear, CEO of Weve: "If you're not investing in mobile, you probably won't be in business in five years' time. In fact, it's very difficult to imagine a business that won't change as a result of the capabilities and data streams we're seeing from mobile technologies."

Mobile technologies could save retail in the same way the digital world destroyed retail in the last 10 years.

David Sear
CEO

Where do you start?

The hurdles to developing custom mobile marketing campaigns – including a bewildering mix of operators, services, platforms, channels and technologies – can increase costs and make it impossible to get accurate and consistent insight into customer behavior. Weve, a joint venture between the three largest mobile operators in the UK – EE, O2 Telefonica and Vodafone – has formed to help businesses overcome those challenges and embrace the opportunities of mobile commerce.

Within eight months, Weve has accumulated 17 million opted-in consumers along with rich information about those consumers that continues to grow. The ability to analyze and build programs based on that data makes Weve a focal point for a whole new set of ideas across the mobile spectrum, from mobile marketing and advertising to mobile payments and transactions, loyalty programs and coupons. "Each day, we think of new things we can do with mobile data and how we can use it to create value for our customers and our business," says Sear.

Take, for example, a campaign to market train tickets to frequent fliers. Using mobile data, a transport company can see how many mobile phones disappear suddenly in Heathrow and reappear in Edinburgh later in the time a flight would take. With further analysis of the data, the company can design specialized offers for different segments of these travelers and promote the offers via their mobile devices. Finally, a mobile commerce component would make it easy for consumers to purchase tickets directly from their device or by waving their smartphone at the ticket counter or transport kiosk.

Or consider an example from Pizza Hut and Starcomm. A campaign was launched to raise awareness about Pizza Hut's happy hour, lunch buffet, pizza parade and kids-eat-free promotions through advertisements on multiple channels. The mobile segment of the campaign delivered a series of highly targeted mobile messages to specific audiences at particular times of the day near Pizza Hut restaurants. The results? Mobile was the No. 1 performing media in driving sales, making it 4.4 times more efficient than TV and 2.6 times more efficient than digital display ads.

Mobile provides consumer insights

"Bizarrely," says Sear, "mobile technologies could save retail in the same way the digital world destroyed retail in the last 10 years," when customers flocked to online stores. Today, most retailers have built online presences, and many are building an infrastructure that ties their brick-and-mortar stores with the digital world through mobile. Consumer insights and analytics are powering those infrastructures.

With users connected so much of the time, consumer mobile habits provide a new form of data that brands never had before. "Location data is really powerful," says Sear, "and it's only one dimension." Other data dimensions include purchase history, daily routines and social data that users elect to make public.

"Weve has created a business model around the intelligent use of real-time information and historical information in order to provide consumers with a service they will enjoy," explains Sear. "Of course, there is no real value in data unless you create value from that data, and our business plan over the course of the next few years is to create strong value in marketing, messaging, display advertising, loyalty services and point-of-sale payment options. All of that requires real-time information that drives value and creates revenue for the balance sheet."

Intelligent messaging made possible

One large supermarket in the UK is casting geo-fence nets with Weve around its stores and marketing to particular customer segments outside of that fence to bring them in with a targeted offer. "Intelligent messaging is absolutely what this is," explains Sear. "How do we give each consumer the right message at the right time with the right offer that will create value for you?"

Suddenly brands can go from giving everyone the same offer to delivering specific, individualized discounts and incentives that really bring people into their stores. "What it does is shift us away from the marketing that's occurred in supermarkets for the last 30 years," says Sear.

Mobile data allows brands to go beyond basic demographics when creating their marketing offers. "The most intelligent marketers will bring the online and offline worlds together to create campaigns that combine media across platforms," says Sear. Some brands are already showing messages to their customers across Weve's opted-in base of consumers in concert with TV advertising campaigns and digital display campaigns.

"They're creating a marketing mix that puts mobile at the center of their whole approach. That will include social networks, mobile messaging and display advertising that's targeted to somebody who's using a particular device. That's the kind of data that really will inform this shift," says Sear. The more brands understand how consumers will respond, when they will respond and whether they're actually in the mood for brand communications, the more powerful their messaging becomes."

The promise of mobile payments

Weve also offers functionality for mobile payments. "The mobile wallet has been talked about for a very long time," says Sear. "We are focused on the way that the whole system is going to evolve."

In the UK, 250,000 outlets are now capable of accepting mobile payments, and 32 million contactless cards are in circulation around the country, two factors that Sear sees creating a tipping point for mobile commerce. “Those two things create a real acceptance that perhaps hasn't been there before,” he says. “The idea of using a contactless debit or credit card to take your journey on the bus launched in London this year too. Bus passengers travel simply by waving a card over a reader as they enter the vehicle. Over 2.5 million contactless transactions worth £3.5 million have taken place across the bus network since the technology was introduced in December.”

As more payment capabilities become available on mobile devices, Sear says, "Marketers now have the ability to really understand return on investment in real time. Not a sample of those people who might have responded. Not a survey about how somebody reacted. But actual data of consumers clicking, moving through the purchase funnel and paying. It's going to be a big shift to when you have all the data at your disposal."

Weve's vision of the mobile wallet is "an intelligent aggregator of multiple services" that includes more than just payments, offering functionality for loyalty programs, incentives and tickets. The potential value is hard to ignore for marketers and business executives.

"If you can take data to build an offer that creates a piece of loyalty, which then results in a payment of goods and services, you're actually tracking the value chain in a new way," concludes Sear. "There's a whole revolution coming to the world of marketing from having not just a fragment of the data but having all of the data needed to make decisions about how to spend your marketing dollars."